Gap Insurance – A Financial Safety Belt
Why is gap insurance considered a financial safety belt? Simply put, it keeps you from being financially ruined when disaster hits your car. After a car accident, your car insurance determines how much your car is worth and sometimes, the cost that the insurance company comes up with can leave you upside-down and owing money. Having gap insurance, can help cover that offset of cost.
Gap insurance also applies to leased car contracts. Some dealers don’t offer gap insurance, which is okay, as long as they include a “gap waiver” into your lease contract. This waiver declares that you are no longer responsible for gap charges that may occur when your leased car is wrecked.
Once you have a gap insurance policy in place, make sure to determine how much is offered in the gap policy. Also, make sure to know how much it is costing you monthly because in order for your gap insurance to be in effect, you must also have a comprehensive insurance policy that covers collisions. Yes, your gap insurance is going to cost you money, but it is going to save you in the long run should your vehicle be severely damaged in an accident.